Foreign Asset Risk Exposure and Performance: an Analysis of Taiwanese and Singaporean Banks

• Main Authors: Ya-Han Chen, 陳雅涵
• Other Authors: 沈中華
• Format: Others
• Language: zh-TW
• Published: 2012
• Online Access: http://ndltd.ncl.edu.tw/handle/33073158449027721608

碩士 === 國立臺灣大學 === 財務金融學研究所 === 100 === Some research had revealed there is positive relation between operation performance and degree of internationalization, DOI. And due to the competition became more and more serious in Taiwan; people start to focus on the issue of overseas expanding. Therefore, we check the relation between “foreign assets to total asset” ratio and profit ability of Taiwanese banks. Besides, recently, Singapore had been noticed that their government gave banks a large amount of support, so we also gathered data of Singapore banks to be compared with Taiwanese banks. We use dynamic panel data and GMM to estimate, for solving the major two problems when considering the relation between overseas assets and operating performance: one is simultaneity and endogeneity; the other one is considering performance one period ahead as an explanatory variable. Our empirical result of Taiwan banking industry showed the higher the “foreign assets to total asset” ratio, the better the operating performance. When use “foreign revenue to total revenue” ratio as an indicator, the higher the ratio, the better the operating performance. When separating the foreign assets into three kinds of exposures: deposit, loans, and securities investment, the result revealed the higher the “foreign deposit to total deposit” ratio, the better the ROA. Another empirical result is of Singapore banking industry. When using ROA and Tobin’s Q as the performance indicators, we found that the higher the “foreign assets to total asset” ratio, the better the performance.